UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended September 30, 2001 Commission file number 0-1790
RUSSELL CORPORATION
(Exact name of registrant as specified in its charter)
Alabama 63-0180720
(State or other jurisdiction of (I.R.S. Employer incorporation or
organization) Identification No.)
3330 Cumberland Blvd, Suite 800, Atlanta, Georgia 30339
and
755 Lee Street, Alexander City, Alabama 35011-0272
(Address of principal executive offices) (Zip Code)
(256) 500-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of common
stock.
Class Outstanding at November 9, 2001
Common Stock, Par Value $.01 Per Share 31,993,602 shares
(Excludes Treasury)
RUSSELL CORPORATION
INDEX
Page No.
--------
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets --
September 30, 2001 and December 30, 2000 2
Consolidated Condensed Statements of Operations --
Thirteen Weeks Ended September 30, 2001 and October 1, 2000 3
Thirty-nine Weeks Ended September 30, 2001 and October 1, 2000 4
Consolidated Condensed Statements of Cash Flows --
Thirty-nine Weeks Ended September 30, 2001 and October 1, 2000 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition 14
Item 3. Quantitative and Qualitative Disclosure about Market Risk 18
Part II. Other Information:
Item 1. Legal Proceedings 18
Item 6. Exhibits and Reports on Form 8-K 19
-1-
RUSSELL CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
September 30, December 30,
2001 2000
------------- ------------
ASSETS (Unaudited) (Note 1)
Current assets:
Cash $ 5,804 $ 4,193
Accounts receivable, net 258,432 198,610
Inventories - Note 2 430,539 406,446
Prepaid expenses & other current assets 42,342 30,892
----------- -----------
Total current assets 737,117 640,141
Property, plant & equipment 1,138,785 1,213,722
Less accumulated depreciation (758,827) (760,714)
----------- -----------
379,958 453,008
Other assets 57,869 60,011
----------- -----------
Total assets $ 1,174,944 $ 1,153,160
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable & accrued expenses $ 133,643 $ 129,456
Current maturities of long-term debt - Note 9 498,868 39,271
----------- -----------
Total current liabilities 632,511 168,727
Long-term debt, less current maturities -- 384,211
Deferred liabilities 60,269 74,282
Shareholders' equity:
Common stock, par value $.01 per share; authorized
150,000,000 shares, issued 41,419,958 shares 414 414
Paid-in capital 46,140 47,104
Retained earnings 678,315 716,460
Treasury stock, at cost (9,436,972 shares at
9/30/01 and 9,524,424 shares at 12/30/00) (224,245) (226,470)
Accumulated other comprehensive loss (18,460) (11,568)
----------- -----------
Total shareholders' equity 482,164 525,940
----------- -----------
Total liabilities & shareholders' equity $ 1,174,944 $ 1,153,160
=========== ===========
See accompanying notes to consolidated condensed financial statements.
-2-
RUSSELL CORPORATION
Consolidated Condensed Statements of Operations
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
13 Weeks Ended
------------------------------------
September 30, October 1,
2001 2000
------------- -----------
Net sales $ 348,790 $ 356,909
Costs & expenses:
Cost of goods sold 260,368 251,684
Selling, general & administrative expenses 59,974 60,066
Interest expense 8,568 8,953
Other-net 45,336 29,405
------------ -----------
374,246 350,108
------------ -----------
Income (loss) before income taxes (25,456) 6,801
Provision (benefit) for income taxes (10,073) 6,275
------------ -----------
Net (loss) income $ (15,383) $ 526
============ ===========
Weighted-average common shares outstanding:
Basic 31,968,257 32,487,210
Diluted 31,968,257 32,960,735
Net (loss) income per common share:
Basic $ (0.48) $ 0.02
Diluted (0.48) 0.02
Cash dividends per common share $ 0.14 $ 0.14
See accompanying notes to consolidated condensed financial statements.
-3-
RUSSELL CORPORATION
Consolidated Condensed Statements of Operations
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
39 Weeks Ended
--------------------------------
September 30, October 1,
2001 2000
------------ -----------
Net sales $ 839,380 $ 891,353
Costs & expenses:
Cost of goods sold 632,220 648,197
Selling, general & administrative expenses 164,252 170,103
Interest expense 24,033 24,306
Other - net 59,406 36,457
------------ -----------
879,911 879,063
------------ -----------
Income (loss) before income taxes (40,531) 12,290
Provision (benefit) for income taxes (15,802) 8,825
------------ -----------
Net (loss) income $ (24,729) $ 3,465
============ ===========
Weighted-average common shares outstanding:
Basic 31,936,285 32,560,361
Diluted 31,936,285 32,899,760
Net (loss) income per common share:
Basic $ (0.77) $ 0.11
Diluted (0.77) 0.11
Cash dividends per common share $ 0.42 $ 0.42
See accompanying notes to consolidated condensed financial statements.
-4-
RUSSELL CORPORATION
Consolidated Condensed Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
39 Weeks Ended
-----------------------------
September 30, October 1,
2001 2000
------------- ----------
Operating Activities:
Net (loss) income $(24,729) $ 3,465
Adjustments to reconcile net (loss) income to
cash used in operating activities:
Depreciation & amortization 37,578 42,998
Deferred income tax benefit (19,509) --
Loss on sale of property, plant & equipment -- 175
Non-cash restructuring, asset impairment &
other unusual charges 59,772 32,275
Foreign currency transaction (gain) loss (1,274) 1,540
Changes in operating assets & liabilities:
Accounts receivable (60,713) (74,036)
Inventories (30,894) (27,092)
Prepaid expenses & other current assets (14,830) (3,776)
Other assets (3,721) 6,916
Accounts payable & accrued expenses 10,311 11,223
Pension & other deferred liabilities 3,275 (4,524)
-------- --------
Net cash used in operating activities (44,734) (10,836)
Investing Activities:
Purchases of property, plant & equipment (28,518) (42,706)
Cash paid for acquisitions -- (39,911)
Proceeds from the sale of property, plant & equipment 9,524 4,504
-------- --------
Net cash used in investing activities (18,994) (78,113)
Financing Activities:
Borrowings on credit facility - net 32,092 97,436
Borrowings on short-term debt 77,829 31,675
Payments on notes payable (33,921) (21,214)
Dividends on common stock (13,415) (13,701)
Cost of common stock for treasury -- (4,649)
Distribution of treasury stock 1,261 755
-------- --------
Net cash provided by financing activities 63,846 90,302
Effect of exchange rate changes on cash 1,493 (1,762)
-------- --------
Net increase (decrease) in cash 1,611 (409)
Cash balance at beginning of period 4,193 9,123
-------- --------
Cash balance at end of period $ 5,804 $ 8,714
======== ========
See accompanying notes to consolidated condensed financial statements.
-5-
RUSSELL CORPORATION
Notes to Consolidated Condensed Financial Statements
1. The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
accounting principles generally accepted in the United States for complete
financial statements. In the opinion of management, the accompanying
interim consolidated condensed financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to present fairly
the financial position of the Company as of September 30, 2001, and the
results of its operations for the thirteen and thirty-nine week periods
ended September 30, 2001 and October 1, 2000, and its cash flows for the
thirty-nine week periods ended September 30, 2001 and October 1, 2000.
The balance sheet at December 30, 2000 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 30, 2000.
The Company's revenues and income are subject to seasonal variations.
Consequently, the results of operations for the thirteen and thirty-nine
week periods ended September 30, 2001 are not necessarily indicative of the
results to be expected for the full year.
2. The components of inventories consist of the following: (in thousands)
9/30/01 12/30/00 10/1/00
--------- -------- ---------
Finished goods $ 343,604 $293,587 $ 297,529
Work in process 57,665 69,568 82,415
Raw materials and supplies 34,365 41,718 40,626
--------- -------- ---------
435,634 404,873 420,570
LIFO and lower-of-cost or
market adjustments, net (5,095) 1,573 (1,189)
--------- -------- ---------
$ 430,539 $406,446 $ 419,381
========= ======== =========
3. On July 22, 1998, the Company announced the Board of Directors had approved
a three-year restructuring and reorganization plan to improve the Company's
global competitiveness. On July 26, 2001, the Company's Board of Directors
approved the expansion of the restructuring and reorganization plan to
further improve the Company's global competitiveness. The results of
operations for the interim periods presented herein reflect one-time and
other unusual charges associated with the plan in accordance with
accounting principles generally accepted in the United States.
Consequently, the results of operations for the thirteen and thirty-nine
week periods ended September 30, 2001 and October 1, 2000 are not
necessarily indicative of the results to be expected on an ongoing
recurring basis when the restructuring and reorganization plan is
completed.
-6-
The charges reflected in the consolidated condensed statements of operations are
as follows: (in thousands)
13 Weeks Ended 39 Weeks Ended
9/30/01 10/1/00 9/30/01 10/1/00
------- ------- ------- -------
Restructuring charges:
Employee termination charges $ 7,924 $ -- $14,346 $ 8,265
Exit cost related to facilities 1,203 789 4,529 3,136
Termination of licenses & contracts -- 3,300 -- 3,300
------- ------- ------- -------
9,127 4,089 18,875 14,701
------- ------- ------- -------
Asset impairment charges:
Impairment of facilities used in operations 23,242 -- 23,242 1,668
Impairment of facilities & equipment
held for disposal 19,145 17,477 30,919 20,254
Impairment of intangible assets -- 7,735 -- 7,735
------- ------- ------- -------
42,387 25,212 54,161 29,657
------- ------- ------- -------
Other unusual charges 2,255 6,337 10,032 8,824
------- ------- ------- -------
Totals before taxes $53,769 $35,638 $83,068 $53,182
======= ======= ======= =======
Totals after taxes $33,337 $25,250 $51,502 $35,775
======= ======= ======= =======
These charges have been classified in the consolidated condensed statements of
operations as follows: (in thousands)
13 Weeks Ended 39 Weeks Ended
9/30/01 10/1/00 9/30/01 10/1/00
------- ------- ------- -------
Cost of goods sold $ 8,358 $ 6,274 $20,391 $15,534
Selling, general & administrative expenses 67 1,267 1,226 2,898
Other, net 45,344 28,097 61,451 34,750
------- ------- ------- -------
$53,769 $35,638 $83,068 $53,182
======= ======= ======= =======
Charges recorded by segments were recorded as follows: (in thousands)
13 Weeks Ended 39 Weeks Ended
9/30/01 10/1/00 9/30/01 10/1/00
------- ------- -------- -------
Restructuring charges:
Activewear $ 9,127 $ 789 $ 17,075 $10,336
International -- 3,300 1,800 4,365
All Other -- -- -- --
------- ------- -------- -------
$ 9,127 $ 4,089 $ 18,875 $14,701
======= ======= ======== =======
Asset impairment charges:
Activewear $42,387 $11,007 $ 55,514 $15,452
International -- 14,205 (1,353) 14,205
All Other -- -- -- --
------- ------- -------- -------
$42,387 $25,212 $ 54,161 $29,657
======= ======= ======== =======
Other unusual charges:
Activewear $ 2,061 $ 227 $ 9,838 $ 1,083
International 194 5,435 194 5,435
All Other -- 675 -- 2,306
------- ------- -------- -------
$ 2,255 $ 6,337 $ 10,032 $ 8,824
======= ======= ======== =======
-7-
A summary of the activity related to the restructuring, asset impairment and
other unusual charges is as follows: (in thousands)
Cash related:
Liability at Expense Amount Liability at
30-Dec-00 Incurred Paid 30-Sep-01
------------ -------- ------- ------------
Exit costs related to facilities $ -- $ 4,529 $ 4,529 $ --
Employee termination charges 3,320 14,346 10,212 7,454
Other 2,406 4,421 5,238 1,589
------- ------- ------- ------
$ 5,726 23,296 $19,979 $9,043
======= ======= ======
Non-cash related:
Impairment charges & other non-cash charges 59,772
------
Total charges $83,068
======
In July 2001, the Company announced the consolidation of the Cross Creek
textile operations into the current dyeing and finishing plant in Mt. Airy,
North Carolina. In addition, the continuing Cross Creek artwear business
will be consolidated within the other activewear segment businesses based
in Atlanta. As a result, the Company recorded asset impairment charges of
$3.1 million, employee severance of $5.6 million (for approximately 285
positions) and other costs of $1.8 million.
During the third quarter the Company reached an agreement with Frontier
Spinning Mills, Inc. to transfer certain of the Company's spinning assets
and yarn employees to a joint venture that will supply most of the
Company's yarn needs. The Company's spinning facilities will continue to
operate as a part of Russell until the transaction is consummated which is
expected to be completed by the end of December 2001. The Company has
recorded asset impairment charges of $38.5 million related to the transfer
of spinning assets to the joint venture. Of the $38.5 million in asset
impairment charges, $15.3 million relates to assets that will be sold to
the joint venture or to other parties and the remaining $23.2 million
relates to yarn facilities and equipment that will be leased to the joint
venture and classified as held for use.
In addition, the Company recorded $2.3 million in severance (for
approximately 165 positions) to reduce manufacturing capacity in the
Activewear segment and Fabric division. The Company also recorded $2.5
million for ongoing maintenance and security costs on facilities closed in
prior periods due to restructuring activities, further losses on sales of
facilities previously classified as held for sale and other unusual costs.
At September 30, 2001, the carrying value of idle facilities and equipment
that are held for disposal amounts to $40.9 million.
4. The Company is a co-defendant in Locke, et al. v. Russell Corporation, et
al., in Jefferson County, Alabama. Fifteen families were the original
plaintiffs in this case. However, ten families dropped out of the case and
there are now only five plaintiff families. The claims asserted in the
complaint are for trespass and nuisance relating to property owned by the
plaintiffs on Lake Martin in a subdivision of Alexander City, Alabama. The
plaintiffs in this case have not specified the amount of damages they are
seeking. The claims and allegations in this case are virtually identical to
a similar case styled Sullivan, et al. v. Russell Corporation, et al.,
which was resolved in the Company's favor in a ruling by the Supreme Court
of Alabama earlier in 2001. The Company plans to vigorously defend this
suit.
By letter dated January 13, 2000, the Company was notified by the United
States Department of Justice ("DOJ") that the DOJ intended to institute
legal proceedings against the Company and certain other parties alleging
violations by those parties of the Clean Water Act in connection with the
treatment and discharge of waste at a water treatment facility operated by
the City of Alexander City, Alabama. Continuing discussions are being held
with the DOJ with regard to the proposed suit by the DOJ. The Company
believes it is in compliance with the Clean Water Act and will vigorously
oppose the imposition of any monetary penalties or injunctive relief in any
lawsuit that may be filed.
-8-
The Company is a party to various other lawsuits arising out of the conduct
of its business, the majority of which, if adversely determined, would not
have a material adverse effect upon the Company.
5. Earnings per share calculated in accordance with SFAS 128, Earnings Per
Share, are as follows: (in thousands except shares and per share amounts)
13 Weeks Ended 39 Weeks Ended
------------------------------ ------------------------------
9/30/01 10/1/00 9/30/01 10/1/00
---------- ----------- ---------- -----------
Net (loss) income $ (15,383) $ 526 $ (24,729) $ 3,465
========== =========== ========== ===========
Basic Calculation:
Weighted-average common shares outstanding 31,968,257 32,487,210 31,936,285 32,560,361
========== =========== ========== ===========
Net (loss) income per common share-basic $ (0.48) $ 0.02 $ (0.77) $ 0.11
========== =========== ========== ===========
Diluted Calculation:
Weighted-average common shares outstanding 31,968,257 32,487,210 31,936,285 32,560,361
Net common shares issuable
on exercise of dilutive stock options -- 473,525 -- 339,399
---------- ----------- ---------- -----------
31,968,257 32,960,735 31,936,285 32,899,760
========== =========== ========== ===========
Net (loss) income per common share-diluted $ (0.48) $ 0.02 $ (0.77) $ 0.11
========== =========== ========== ===========
6. For the periods ended September 30, 2001 and October 1, 2000, accumulated
other comprehensive loss as shown in the consolidated condensed balance
sheets was comprised of foreign currency translation adjustments and
adjustments related to hedging activities, including interest rate swap
agreements, cotton futures contracts and foreign currency forward
contracts. The components of comprehensive loss, net of tax, for these
periods were as follows: (in thousands)
13 Weeks Ended 39 Weeks Ended
----------------------- -------------------------
9/30/01 10/1/00 9/30/01 10/1/00
------- ------- -------- -------
Net (loss) income $(15,383) $ 526 $(24,729) $ 3,465
Foreign currency translation loss (1,218) (816) (2,256) (5,489)
Change in unrealized value of derivative
instruments (2,488) -- (4,058) --
Cumulative effect adjustment (SFAS 133) -- -- (578) --
-------- ----- -------- -------
Comprehensive loss $(19,089) $(290) $(31,621) $(2,024)
======== ===== ======== =======
7. Russell Corporation has two reportable segments: Activewear and
International operations. The Company's Activewear segment consists of
three strategic business units that sell the following products to sporting
goods dealers, department and specialty stores, mass merchants, wholesale
clubs, college bookstores, screen printers, distributors, and mail order
catalogs: T-shirts, fleece products (such as sweatshirts and pants),
athletic uniforms and knit shirts. The International business distributes
activewear products to locations in approximately 40 countries. Other
segments that do not meet the quantitative thresholds for determining
reportable segments sell fabrics to other apparel manufacturers, and
manufacture and sell socks to mass merchants. These are included in the
"All Other" data presented herein.
-9-
The Company evaluates performance and allocates resources based on profit or
loss from operations before interest and income taxes, restructuring,
reorganization and other unusual charges (Segment EBIT). The accounting policies
of the reportable segments are the same as those described in Note One to the
Company's consolidated financial statements in its Annual Report on Form 10-K
for the year ended December 30, 2000, except that inventories are valued at
standard cost at the segment level, whereas a substantial portion of inventories
are valued on a Last-In, First-Out (LIFO) basis in the consolidated financial
statements. Intersegment transfers are recorded at the Company's cost; there is
no intercompany profit or loss on intersegment transfers.
During fiscal 2001, the Company allocated more corporate expenses to its
reportable segments. Accordingly, the respective prior year amounts have been
reclassified to conform to the fiscal year 2001 presentation. These changes had
no impact on previously reported results of operations or shareholders' equity
on a consolidated basis.
13 Weeks ended September 30, 2001
(in thousands)
Activewear International All Other Total
---------- --------- ----------- ----------
Net sales $ 299,068 $ 21,767 $ 27,955 $ 348,790
Depreciation &
amortization expense 10,558 140 878 11,576
Segment EBIT 36,577 1,226 2,864 40,667
Total assets 1,028,714 68,210 78,020 1,174,944
13 Weeks ended October 1, 2001
(in thousands)
Activewear International All Other Total
---------- --------- ----------- ----------
Net sales $ 294,779 $ 30,246 $ 31,884 $ 356,909
Depreciation &
amortization expense 14,273 958 986 16,217
Segment EBIT (loss) 49,388 (1,551) 5,387 53,224
Total assets 1,059,660 112,713 85,968 1,258,341
39 Weeks ended September 30, 2001
(in thousands)
Activewear International All Other Total
---------- --------- ----------- ----------
Net sales $ 695,742 $ 59,926 $ 83,712 $ 839,380
Depreciation &
amortization expense 34,452 393 2,733 37,578
Segment EBIT 68,725 2,099 10,241 81,065
Total assets 1,028,714 68,210 78,020 1,174,944
39 Weeks ended October 1, 2000
(in thousands)
Activewear International All Other Total
---------- --------- ----------- ----------
Net sales $ 706,995 $ 85,739 $ 98,619 $ 891,353
Depreciation &
amortization expense 37,719 2,160 3,119 42,998
Segment EBIT (loss) 93,205 (6,878) 17,175 103,502
Total assets 1,059,660 112,713 85,968 1,258,341
-10-
A reconciliation of combined segment EBIT to consolidated income (loss) before
income taxes is as follows: (in thousands)
13 Weeks Ended 39 Weeks Ended
----------------------- ------------------------
9/30/01 10/1/00 9/30/01 10/1/00
-------- -------- -------- ---------
Total segment EBIT $ 40,667 $ 53,224 $ 81,065 $ 103,502
Restructuring, asset impairment &
other unusual charges (53,769) (35,638) (83,068) (53,182)
Unallocated amounts:
Corporate expenses (3,786) (1,832) (14,495) (13,724)
Interest expense (8,568) (8,953) (24,033) (24,306)
-------- -------- -------- ---------
Consolidated (loss) income before income taxes $(25,456) $ 6,801 $(40,531) $ 12,290
======== ======== ======== =========
8. As of December 31, 2000, the Company adopted FASB Statement No. 133. In
accordance with the provisions of Statement 133, the Company recorded a
transition adjustment during the first quarter of 2001. The transition
adjustment increased Accumulated Other Comprehensive Loss by
approximately $578,000 net of taxes and decreased net assets by
approximately $578,000.
The Company uses derivatives, including futures contracts, forward
contracts and swap contracts, to manage its exposure to movements in
commodity prices, foreign exchange rates and interest rates,
respectively. Initially, upon adoption of the new derivative accounting
requirements, and prospectively, on the date a derivative contract is
entered into, the Company designates the derivative as either 1) a
hedge of a recognized asset or liability or an unrecognized firm
commitment (fair value hedge) or 2) a hedge of a forecasted transaction
or of the variability of cash flows to be received or paid related to a
recognized asset or liability (cash flow hedge).
For fair value hedges, both the effective and ineffective portion of
the changes in the fair value of the derivative, along with the gain or
loss on the hedged item that is attributable to the hedged risk, are
recorded in earnings. The effective portion of changes in fair value of
a derivative that is designated as a cash flow hedge is recorded in
Accumulated Other Comprehensive Loss. When the hedged item is realized,
the gain or loss included in Accumulated Other Comprehensive Loss is
relieved. Any ineffective portion of the changes in the fair values of
derivatives used as cash flow hedges are reported in the Consolidated
Condensed Statements of Operations.
The Company formally documents its hedge relationships, including
identification of the hedging instruments and the hedged items, as well
as its risk management objectives and strategies for undertaking the
hedge transaction. Derivatives are recorded in the Consolidated
Condensed Balance Sheets at fair value. The Company also formally
assesses both at inception and at least quarterly, thereafter, whether
the derivatives that are used in hedging transactions are highly
effective in offsetting changes in either the fair values or cash flows
of the hedged item.
Interest rate swap agreement-To manage interest rate risk, the Company
has entered into an interest rate swap that effectively fixes the
interest payments of a certain floating rate debt instrument. The
interest rate swap agreement is accounted for as a cash flow hedge and
qualifies for use of the "short cut" method under Statement 133 because
the cash flows from the interest rate swap perfectly offset the changes
in the cash flows associated with the floating rate of interest on the
debt. The transition adjustment to record the fair value of the
interest rate swap was a loss of $557,000 ($345,000, net of taxes) with
an offsetting entry to Accumulated Other Comprehensive Loss. There has
been no amount reclassified from Accumulated Other Comprehensive Loss
to net earnings during the year ended September 30, 2001. The fair
value of the swap decreased by $1,696,000 year-to-date, causing
Accumulated Other Comprehensive Loss to decrease to $2,253,000
($1,397,000, net of taxes).
-11-
Foreign currency forward contracts- The Company generates international
revenues and expenses from its activities in various parts of the world
and, as a result, is exposed to movement in foreign currency exchange
rates. As of September 30, 2001, the Company had entered into foreign
exchange forward contracts through December, 2002 to reduce the effect
of fluctuating foreign currencies on anticipated purchases of inventory
and sale of goods denominated in currencies other than the functional
currencies of international subsidiaries. Gains and losses on the
derivatives are intended to offset gains and losses on the hedged
transactions in an effort to reduce the earnings volatility resulting
from fluctuating foreign currency exchange rates. The foreign exchange
forward contracts are primarily accounted for as cash flow hedges. The
principal currencies hedged by the Company include the US Dollar,
European EURO, and British pound sterling. There was no transition
adjustment recorded upon adoption of FAS 133, as there were no
significant foreign currency forward contracts impacted by the
statement. The fair value of all forward contracts, as of September 30,
2001, is ($487,000), ($302,000) net of taxes. The Company anticipates
that approximately ($487,000), ($302,000) net of taxes, will be
reclassed to net earnings during the next twelve months when the
anticipated transactions occur. The change in fair value of the forward
contracts decreased net assets and Accumulated Other Comprehensive Loss
by $714,000 ($443,000 net of taxes) year-to-date. The gains
reclassified into net earnings for the thirteen and thirty-nine week
periods ended September 30, 2001 amounted to $37,000 ($23,000 net of
taxes) and $227,000 ($141,000 net of taxes), respectively.
The Company also was a party to foreign exchange forward contracts
during the first quarter that did not qualify for hedge accounting
under Statement 133. The Company recorded these contracts at fair value
with the related changes in fair value, which amounted to a gain of
$903,000 ($560,000 net of taxes) reported in income in the first
quarter 2001.
Futures contracts- Raw materials used by the Company are subject to
price volatility caused by weather, supply conditions and other
unpredictable factors. The Company has entered into futures contracts
through December 2002 to hedge commodity (primarily cotton) price risk
on anticipated purchases. The futures contracts are accounted for as
cash flow hedges. The transition adjustment to record the fair value of
the futures contracts on the Company's Consolidated Condensed Balance
Sheets was a loss of $376,000 ($233,000 net of taxes) with an
offsetting entry to Accumulated Other Comprehensive Loss. The Company
reclassifies gains and losses on futures contracts designated as cash
flow hedges from Accumulated Other Comprehensive Loss in the period
during which the hedged item affects earnings. The change in fair value
of the commodity futures contracts decreased net assets and increased
Accumulated Other Comprehensive Loss by $3,815,000 (net of taxes)
year-to-date. Losses reclassified to current earnings during the
thirteen and thirty-nine week periods ended September 30, 2001 amounted
to $303,000 and $1,113,000 (net of taxes), respectively. The Company
anticipates that the unrealized loss of $2,935,000 (after tax) recorded
in Accumulated Other Comprehensive Loss as of September 30, 2001 will
be reclassified into net income during the next twelve months.
9. As reported in the Company's Quarterly Report on Form 10-Q for the
quarter ended July 1, 2001, recording charges during the second quarter
of 2001 associated with the expansion of the Company's ongoing
restructuring plan caused the Company's ratio of long-term debt to
total capitalization to exceed the ratio permitted under the Company's
principal long-term debt agreements as of July 1, 2001. The Company
obtained agreements from the parties to the affected debt agreement to
waive compliance with the applicable covenants until September 17,
2001, and the Company reached an agreement with certain of the bank
group lenders under the Company's revolving credit facility to loan the
Company an additional $75 million in seasonal bridge financing. The
bridge loan was paid back prior to its October 31, 2001 maturity.
The Company also obtained waivers or amendments under its outstanding
debt agreement of various other covenants relating to limitations on
the amount of the Company's outstanding debt, debt service coverage
ratios and certain intercompany transactions. Such waivers were
effective through September 17, 2001. The Company also agreed to secure
most of its outstanding debt by a pledge of substantially all of its
assets by September 17, 2001.
-12-
As reported in the Company's Current Report on Form 8-K dated September
18, 2001 and because the Company was involved in negotiations with
respect to a major acquisition, the Company and the parties to the
affected debt agreements agreed to further extend the waivers under the
Company's outstanding long-term debt agreements to early in the first
quarter of 2002, provided that during such period the Company secured
most of its outstanding debt by effecting a pledge of substantially all
its assets (including meeting certain interim deadlines with respect to
effecting such pledges and obtaining any required shareholder
approval).
On October 15, 2001, an agreement was reached with such lenders further
extending the time frame for the completion of the pledge of assets and
extending and modifying certain other requirements and deadlines
relating to the affected debt agreements.
The Company is negotiating with its lenders to revise its agreements
within the agreed upon time frame. However, because the current waiver
agreements do not extend beyond the next 12 months, the Company has
classified its principal debt facilities as current liabilities in the
accompanying Consolidated Condensed Balance Sheets as of September 30,
2001.
10. Recent Accounting Pronouncements
In July 2001, the FASB issued SFAS No. 142, Goodwill and Intangible
Assets. SFAS No. 142 eliminates amortization of goodwill, and requires
an impairment-only model to recording the value of goodwill. SFAS No.
142 requires that impairment be tested at least annually at the
reporting unit level, using a two-step impairment test. The first step
determines if goodwill is impaired by comparing the fair value of the
reporting unit as a whole to the book value. If a deficiency exists,
the second step measures the amount of the impairment loss as the
difference between the implied fair value of goodwill and its carrying
amount. Purchased intangibles with indefinite economic lives will be
tested for impairment annually using a lower of cost or fair value
approach. Other intangibles will continue to be amortized over their
useful lives and reviewed for impairment. Upon adoption, amortization
of the remaining book value of goodwill will cease and the new
impairment-only approach will apply. A transitional impairment test of
all goodwill is required to be completed within six months of adopting
SFAS No. 142. The Company has not yet determined whether any of its
unamortized goodwill ($13.5 million at September 30, 2001) would be
impaired under the new guidance. However, any impairment charge
resulting from the transitional impairment test would be recognized as
a cumulative effect of a change in accounting principle. The Company
will adopt SFAS No. 142 in the first quarter of 2002. Adoption of SFAS
No. 142 is expected to increase net income by approximately $850,000
($.03 per share) in 2002 due to the elimination of amortization of
goodwill.
In August, 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets that supersedes FASB
Statement No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of, and provides a single
accounting model for long-lived assets to be disposed of. Although
retaining many of the fundamental recognition and measurement
provisions of Statement No. 121, the new rules significantly change the
criteria that would have to be met to classify an asset as
held-for-sale. The new rules also supersede the provisions of APB
Opinion 30 with regard to reporting the effects of a disposal of a
segment of a business and require expected future operating losses from
discontinued operations to be displayed in discontinued operations in
the period(s)in which the losses are incurred (rather than as of the
measurement date as presently required by APB 30). In addition, more
dispositions will qualify for discontinued operations treatment in the
income statement. The Company plans to adopt SFAS No. 144 in the first
quarter of 2002. The provisions of this Statement are not expected to
have a significant impact on the Company.
-13-
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
RESULTS OF OPERATIONS
Thirteen weeks ended September 30, 2001 compared to October 1, 2000
NET SALES. Net sales decreased 2.3% or $8,119,999 to $348,790,000 for third
quarter 2001 from $356,909,000 during the comparable prior year period. Sales
for the third quarter were up 1% versus prior year, excluding loss of
$13,165,000 in revenue from discontinued businesses partially offset by revenue
from a previous acquisition. In examining revenue by segment, a sales increase
of $4,289,999 in the Activewear segment was more than offset by a decline of
$8,479,999 within the Company's International segment and a decline of
$3,929,000 for all other. Overall dozens shipped within the Activewear segment
were up approximately 10% over the comparable prior year period. The favorable
increase in dozens shipped was offset by the negative impact of lower prices,
primarily in the artwear channel, as well as discontinued business of $9,265,000
in the third quarter versus the comparable prior year period. Sales to mass
merchandisers were particularly strong. Of the sales decline in the
International segment, approximately $3,900,000 was related to the elimination
of unprofitable product lines in Europe during the second half of fiscal year
2000. The remaining sales decline in the International segment is primarily
related to lower volume shipments in Europe due to general market softness and
distributors rebalancing inventories. The decrease in net sales for all other
was primarily attributable to a decline in fabric sales to other manufacturers.
GROSS MARGIN %. The Company's overall gross margin percentage decreased to 25.4%
for third quarter 2001 versus 29.5% in the comparable prior year period.
Excluding the impact of restructuring, asset impairment, and other unusual
charges ("special charges"), as described in Note 3 to the consolidated
condensed financial statements, of $8,358,000 and $6,274,000 for 2001 and 2000,
respectively, the overall gross margin percentage decreased to 27.7% for 2001
from 31.2% for 2000. Gross margins were negatively impacted by lower prices,
primarily in the artwear channel, curtailed production schedules to reduce
inventory (estimated at $5.5 million or $.11 per share), additional product
features, and higher cotton and energy costs. However, gross margins continue to
be positively impacted by the Company's ongoing efforts in improving and
streamlining its manufacturing processes.
EARNINGS BEFORE INTEREST AND TAXES (EBIT). Consolidated EBIT as a percent of net
sales decreased to 10.6% for third quarter 2001 from 14.4% in the comparable
prior year period when calculated exclusive of special charges of $53,769,000
and $35,638,000 for 2001 and 2000, respectively. The Activewear segment EBIT,
exclusive of special charges, as a percent of net sales is 12.2% for third
quarter 2001 down from 16.8% for third quarter 2000. This decline is primarily
attributed to lower prices, particularly in the artwear channel, curtailed
production schedules, additional product features, and higher cotton and energy
costs. The International segment EBIT, exclusive of special charges, as a
percent of net sales increased to 5.6% for third quarter 2001, up from a
negative 5.1% for third quarter 2000. The improvement within the International
segment was due to the elimination of unprofitable product lines in Europe
during the second half of fiscal year 2000. In addition, product costs within
the International segment were lower due to the closure of manufacturing
facilities in Scotland during fiscal 2000 and the increased use of third party
suppliers. The all other EBIT, exclusive of special charges, as a percent of net
sales decreased to 10.2% for third quarter 2001, down from 16.9% for third
quarter 2000, primarily due to declining sales volumes.
Thirty-nine weeks ended September 30, 2001 compared to October 1, 2000
NET SALES. Net sales decreased 5.8%, or $51,973,000, to $839,380,000 for the
thirty-nine weeks ended September 30, 2001 from $891,353,000 during the
comparable prior year period. The overall net decrease consisted of a 1.6%
decline, or $11,253,000, within the Company's Activewear segment; a 30.1%
decline, or $25,813,000, within the Company's International segment; and a 15.1%
decline, or $14,907,000, for all other. Overall dozens shipped within the
Activewear segment were flat over the comparable prior year period. Activewear
net sales were negatively impacted by lower prices, primarily in the artwear
channel.
-14-
Of the decline in the International segment sales, approximately $12,700,000 was
related to the elimination of unprofitable product lines in Europe during the
second half of fiscal year 2000. Additionally, the weaker EURO and British pound
sterling represented $1.2 million and $1.7 million, respectively, of the sales
decline. The remaining sales decline in the International segment is primarily
related to lower volume shipments in Europe due to general market softness and
inventory rebalancing by distributors. The decrease in net sales for all other
was attributable to a decline in fabric sales to other manufacturers and a
decrease in sock sales.
GROSS MARGIN %. The Company's overall gross margin percentage decreased to 24.7%
for the thirty-nine weeks ended September 30, 2001 versus 27.3% in the
comparable prior year period. Excluding the impact of special charges of
$20,391,000 and $15,534,000 for 2001 and 2000, respectively, the overall gross
margin percentage decreased to 27.1% for 2001 from 29.0% for 2000. Gross margins
were negatively impacted by the decrease in net sales, lower prices, primarily
in the artwear channel, curtailed production schedules to reduce inventory
(estimated at $10.5 million or $.20 per share), additional product features, and
higher cotton and energy costs. However, gross margins continue to be positively
impacted by the Company's ongoing efforts in improving and streamlining its
manufacturing processes.
SELLING, GENERAL AND ADMINISTRATIVE (SG&A). SG&A as a percent of net sales
increased to 19.6% for the thirty-nine weeks ended September 30, 2001 versus
19.1% in the comparable prior year period. Excluding the impact of special
charges of $1,225,000 and $2,898,000 for 2001 and 2000, respectively, SG&A as a
percent of net sales increased to 19.4% for 2001 from 18.8% for 2000.
EARNINGS BEFORE INTEREST AND TAXES (EBIT). Consolidated EBIT as a percent of net
sales decreased to 7.9% for the thirty-nine weeks ended September 30, 2001 from
10.1% in the comparable prior year period when calculated exclusive of special
charges of $83,068,000 and $53,182,000 for 2001 and 2000, respectively. The
Activewear segment EBIT, exclusive of special charges, as a percent of net sales
is 9.9% for the thirty-nine weeks ended September 30, 2001, down from 13.2% in
the comparable prior year period. This decline is primarily attributed to the
decrease in net sales, lower prices, primarily in the artwear channel, curtailed
production schedules, additional product features, and higher cotton and energy
costs. The International segment EBIT, exclusive of special charges, as a
percent of net sales increased to 3.5% for the thirty-nine weeks ended September
30, 2001, up from a negative 8.0% in the comparable prior year period. The
improvement within the International segment was due to the elimination of
losses incurred during fiscal 2000 related to the elimination of unprofitable
product lines in Europe during the second half of fiscal year 2000. In addition,
product costs within the International segment were lower due to the closure of
manufacturing facilities in Scotland during fiscal 2000 and the increased use of
third party suppliers. The International segment also recognized gains of
$903,000 on the settlement of foreign currency forward contracts during the
first quarter with no comparable gains in the prior year to date period. The all
other EBIT, exclusive of special charges, as a percent of net sales decreased to
12.2% for the thirty-nine weeks ended September 30, 2001 down from 17.4% in the
comparable prior year period and is primarily due to the net sales decrease.
INCOME TAXES. The Company's effective income tax rates for the thirteen week
periods ending September 30, 2001 and October 1, 2000 were 39.6% and 43.2%,
respectively. The Company's effective income tax rates for the thirty-nine week
periods ending September 30, 2001 and October 1, 2000 were 39.0% and 44.1%,
respectively. The effective income tax rates for both the thirteen and
thirty-nine week periods ending October 1, 2000 have been calculated exclusive
of a non-deductible impairment charge of $7,735,000 taken during the third
quarter of 2000 to write-off the remaining carrying value of goodwill associated
with the European business. The current year effective income tax rates were in
line with the Company's expectations.
-15-
RESTRUCTURING ACTIVITIES. During the second quarter 2001, the Company announced
the closing of two domestic sewing plants, one textile operation and one yarn
manufacturing facility. In connection with these closings, approximately 770
employees were terminated during the quarter. Asset impairment charges of $11.0
million and employee severance and related costs of $6.4 million were recognized
in the second quarter related to these plant closings. The Company also incurred
approximately $2.2 million in ongoing maintenance cost related to facilities
that have been closed in prior periods in connection with prior restructuring
activities. Total restructuring, asset impairment and other unusual charges
recognized in the second quarter amounted to $26.6 million ($16.5 million after
tax).
On July 26, 2001 the Board of Directors announced the expansion of its
restructuring plans to further improve the Company's global competitiveness.
Restructuring is expected to be substantially completed in the current fiscal
year.
The elements of the expanded restructuring include aligning the organization by
distribution channels to provide stronger focus on customer service, supply
chain management and cost-effective operations. As part of this reorganization,
the current Cross Creek Apparel artwear business headquartered in Mt. Airy,
North Carolina, will be combined with the artwear business headquartered in
Atlanta. The Cross Creek private label business and textile operations will
remain in Mt. Airy. During the second quarter, the Company also announced that
it intends to license the Cross Creek brand for the golf and retail channels of
distribution. The Company will continue to sell the Cross Creek brand through
the artwear channel, which is the brand's principal channel of distribution. The
expected impact on net sales in the Activewear segments from restructuring and
repositioning the Cross Creek brand will be a decrease of approximately $20
million on an annual basis. Elimination of these sales is expected to have a
positive impact on operating margins. Approximately 285 positions will be
eliminated in connection with these restructuring activities in the second half
of the year. The costs associated with these terminations and other aspects of
the Cross Creek restructuring plan were recognized during the third quarter.
(See Note 3 to the Consolidated Condensed Financial Statements).
During the third quarter the Company reached an agreement with Frontier Spinning
Mills, Inc. to transfer certain of the Company's spinning assets and yarn
employees to a joint venture that will supply most of the Company's yarn needs.
The Company's spinning facilities will continue to operate as a part of Russell
until the transaction is consummated which is expected to be completed by the
end of December 2001. The Company has recorded asset impairment charges of $38.5
million related to the transfer of spinning assets to the joint venture. Of the
$38.5 million in asset impairment charges, $15.3 million relates to assets that
will be sold to the joint venture or to other parties and the remaining $23.2
million relates to yarn facilities and equipment that will be leased to the
joint venture and classified as held for use.
As indicated last quarter, the Company's European business has stabilized and is
projected to be profitable in 2001. The Company announced the restructuring of
its Russell Athletic(R) business in Europe during the third quarter of 2000. The
Company has entered into six license agreements for Russell Athletic(R) for
Germany, Italy, and various other European countries.
LIQUIDITY AND CAPITAL RESOURCES
The Company's current ratio was 1.2 and 3.4 at September 30, 2001 and October 1,
2000, respectively. The significant decrease in the current ratio was primarily
attributable to the reclassification of outstanding borrowings under the
Company's principal debt facilities (see Note 9 to the Consolidated Condensed
Financial Statements) in 2001. Total debt to capitalization increased to 50.9%
at September 30, 2001, versus 49.0% at October 1, 2000, reflecting the effects
of the Company's ongoing restructuring activities and increased borrowings to
fund a somewhat greater seasonal build up of inventories in the current fiscal
year than in fiscal 2000.
-16-
Required cash for operations and to fund purchases of property, plant and
equipment and dividends was principally provided by borrowings under the
Company's revolving credit facility and short-term borrowings during the period
ended September 30, 2001.
The Company's strategy to deal with future cash requirements is to utilize a
combination of cash flows from operations, existing availability under the
Company's credit facility, sale leasebacks and/or accessing public debt markets.
As reported in the Company's Quarterly Report on Form 10-Q for the quarter ended
July 1, 2001, recording charges during the second quarter of 2001 associated
with the expansion of the Company's ongoing restructuring plan caused the
Company's ratio of long-term debt to total capitalization to exceed the ratio
permitted under the Company's principal long-term debt agreements as of July 1,
2001. The Company obtained agreements from the parties to the affected debt
agreement to waive compliance with the applicable covenants until September 17,
2001, and the Company reached an agreement with certain of the bank group
lenders under the Company's revolving credit facility to loan the Company an
additional $75 million in seasonal bridge financing. The bridge loan was paid
back prior to its October 31, 2001 maturity.
The Company also obtained waivers or amendments under its outstanding debt
agreement of various other covenants relating to limitations on the amount of
the Company's outstanding debt, debt service coverage ratios and certain
intercompany transactions. Such waivers were effective through September 17,
2001. The Company also agreed to secure most of its outstanding debt by a pledge
of substantially all of its assets by September 17, 2001.
As reported in the Company's Current Report on Form 8-K dated September 18, 2001
and because the Company was involved in negotiations with respect to a major
acquisition, the Company and the parties to the affected debt agreements agreed
to further extend the waivers under the Company's outstanding long-term debt
agreements to early in the first quarter of 2002, provided that during such
period the Company secured most of its outstanding debt by effecting a pledge of
substantially all its assets (including meeting certain interim deadlines with
respect to effecting such pledges and obtaining any required shareholder
approval).
On October 15, 2001, an agreement was reached with such lenders further
extending the time frame for the completion of the pledge of assets and
extending and modifying certain other requirements and deadlines relating to the
affected debt agreements.
The Company is negotiating with its lenders to revise its loan agreements and
anticipates completing those negotiations within the agreed upon time frame.
Concurrently, Russell is developing a new capital structure which will increase
financial flexibility in support of internal and external growth initiatives and
is expected to involve a debt offering in the future.
The current waiver agreements do not extend beyond the next 12 months;
therefore, the Company has classified its principal debt facilities as current
liabilities in the accompanying Consolidated Condensed Balance Sheets as of
September 30, 2001.
CONTINGENCIES
For information concerning ongoing litigation of the Company, see Note 4 to the
Consolidated Condensed Financial Statements.
RECENT DEVELOPMENTS
Russell Corporation has called a shareholders meeting for 10 a.m. on Monday,
December 10, 2001 in Alexander City, Alabama to approve a resolution to
effectively eliminate the requirement imposed by Alabama law that requires
shareholder approval of any increase in the amount of the Company's bonded
indebtedness by authorizing the Company to incur additional bonded indebtedness
without further shareholder approval. This will allow Russell's Board of
Directors to determine the proper amount of debt that the Company may incur.
-17-
This requirement is imposed by the 1901 Constitution of the State of Alabama.
Most other states do not have laws requiring such approval.
As stated in the Company's proxy materials sent to shareholders on or about
November 6, 2001, "Russell needs this change to have more control of its own
finances so that it is in a better position to take advantage of opportunities
such as making acquisitions, purchasing property or funding the Company's
working capital needs." Although the Company's debt level has declined over the
past four years, the Company needs flexibility to incur debt for appropriate
corporate purposes without having to be confined by the limitations of state
law.
FORWARD LOOKING INFORMATION
This Quarterly Report on Form 10-Q, including management's discussion and
analysis, contains certain statements that describe the Company's beliefs
concerning future business conditions and prospects, growth opportunities and
the outlook for the Company based upon information currently available. Wherever
possible, the Company has identified these "forward-looking" statements (as
defined in Section 21E of the Securities and Exchange Act of 1934) by words such
as "anticipates," "believes," "intends," "estimates," "expects," "projects" and
similar phrases. These forward-looking statements are based upon assumptions the
Company believes are reasonable. Such forward-looking statements are subject to
risks and uncertainties which could cause the Company's actual results,
performance and achievements to differ materially from those expressed in, or
implied by, these statements, including among other matters, the ability of the
Company to (i) effect the restructuring within the projected timeframe in line
with expected savings, (ii) successfully negotiate amendments to its current
debt agreements on appropriate terms (including obtaining shareholder approval
of the proposal to be presented at the December 10, 2001 meeting of
shareholders), (iii) complete sale/leaseback transactions and access public
debt markets, and (iv) develop a new capital structure in support of internal
and external growth initiatives, as well as significant competitive activity,
exchange rates, interest rates, wage increases, increases in raw material and
energy costs, changes in customer demand for the Company's products, inherent
risks in the market place associated with new products and new product lines,
including uncertainties about trade and consumer acceptance and other risk
factors listed from time to time in the Company's SEC reports and announcements.
The Company assumes no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
The Company is exposed to market risks relating to fluctuations in interest
rates, currency exchange rates and commodity prices. There has been no material
change in the Company's market risks that would significantly affect the
disclosures made in the Annual Report on Form 10-K for the year ended December
30, 2000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Contingencies
For information concerning ongoing litigation of the Company, see Note 4 to the
Consolidated Condensed Financial Statements.
-18-
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 First Amendment dated July 25, 2001 to the Credit Agreement
dated as of October 15, 1999 relating to the Company's
$250,000,000 Revolving Loan Facility
4.2 Second Amendment dated September 17, 2001 to the Credit
Agreement dated as of October 15, 1999 relating to the
Company's $250,000,000 Revolving Loan Facility
(b) Reports on Form 8-K
On September 18, 2001, the Company filed Form 8-K disclosing the continuance of
waivers obtained from its lenders related to covenant violations under its
long-term debt instruments. The Company further announced the extension of these
waivers until early in the first quarter of 2002, provided a pledge of
substantially all its assets is completed by that time. Financial Statements
were not included in the September 18, 2001 Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RUSSELL CORPORATION
----------------------------------
(Registrant)
Date : November 14, 2001 /s/ Robert D. Martin
----------------------------------
Robert D. Martin
Senior Vice President, and
Chief Financial Officer
Date : November 14, 2001 /s/ Larry E. Workman
----------------------------------
Larry E. Workman, Controller
(Principal Accounting Officer)
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